EU 'Ready To React' To US Tariffs

Alicia Cross

The EU has warned that it stands ready to slap "rebalancing" tariffs on about 2.8 billion euros ($3.4 billion) worth of US steel, agricultural and other products, like peanut butter, cranberries and orange juice.

Turnbull added Australia had "the closest possible military and security alliance with the United States and it gets closer all of the time".

Other officials at the EU, by far the biggest trading partner of the United States by value, have warned it could take counter-measures including European tariffs on USA oranges, tobacco and bourbon.

Malmstrom said that the Commissioners hope that as the European Union is a USA security partner it will be excluded.

She said, "trade creates wealth, when it is based on exchange and cooperation" and added, referring indirectly to the surprise resignation of Trump's top economic adviser Gary Cohn Tuesday, that, "advocates for this in the US administration are very important".

European industry associations called on Malmstrom to react to the tariffs.

Brussels has warned it could tax imports of politically sensitive American products like orange juice or motorcycles in response to Trump's tariffs.

Trump announced Thursday that he was slapping tariffs of 25 percent on imported steel and 10 percent on aluminum, but he temporarily exempted big steel producers Canada and Mexico - provided they agree to renegotiate a North American trade deal to his satisfaction.

Japan's Seko said he also had expressed concern to Lighthizer and warned of major market disruption.

Commissioner for Trade Cecilia Malmström said earlier in the week (7 March) that she was ready to react proportionately and in line with WTO rules to protect the EU's economic interests if the United States chose to introduce global tariffs on steel and aluminium.

The EU exported about 5.5 million tons of steel to the US previous year. "These are measures that would defend our interests".

"A trade war has no winners", Sweden's Malmstroem told reporters after the European Commission, which handles trade matters for the bloc, discussed the tariffs.

All this strengthens the risk of trade wars and their consequences - the last thing Europe needs.

But the US has already thrown up barriers to Chinese imports.

Brazil is the United States' No. 2 steel supplier.

Some Democrats praised the move.

By contrast, Holger Bingmann of exporters' association BGA warned that "the European Union may now take steps we wouldn't want. we call urgently for level-headedness".

She did not say what level of tariffs the European Union would set, leaving it unclear what the economic impact would be. "We should prevent a trade war situation from excessive protectionism, in which the entire world harms each other", Trade Minister Paik Un-gyu told a meeting with steelmakers.